China says it will take “necessary measures” after Panama voids port contract

The contracts allowing a Chinese-affiliated company to operate key ports at both ends of the Panama Canal are unconstitutional, Panama’s Supreme Court ruled on Thursday. The decision prompted responses from both China and Hong Kong.Beijing said on Friday that it would take “necessary measures” to protect the interests of its enterprises after the annulment of a concession permitting Hong Kong–based CK Hutchison to operate major ports linked to the Panama Canal.
The ruling concerns Panama Ports Company (PPC), a subsidiary of Hong Kong–based CK Hutchison Holdings. PPC has for many years operated major container terminals at the ports of Balboa and Cristobal, near the canal’s Pacific and Atlantic entrances. These terminals handle millions of containers each year and play an important role in global trade.
In a brief statement late on Thursday, the Supreme Court said the concession contracts violated Panama’s constitution. The decision followed a government audit and legal complaints alleging irregularities, including missing payments and procedural issues in the 25-year renewal of the port contracts approved in 2021.China’s Foreign Ministry spokesperson, Guo Jiakun, told reporters in Beijing that China “will take all necessary measures to resolutely safeguard the legitimate rights and interests of Chinese enterprises”, but did not specify what those measures might be.

Guo added that the company reserves all rights, including the pursuit of legal action, and said the verdict conflicts with the rules under which Panama authorised the concession granted to the company.

CK Hutchison and PPC strongly criticised the court’s decision. The company said the ruling “lacks legal basis” and affects not only the business but also jobs and the financial stability linked to port operations. PPC added that it would examine its legal options both in Panama and internationally.

In a separate statement, the Hong Kong government strongly condemned the decision, saying it firmly opposes any foreign government using oppressive, coercive or other unreasonable means to seriously harm the commercial interests of Hong Kong businesses.

Since the 1990s, Panama Ports Company has held contracts to operate container ports at both the Pacific and Atlantic entrances of the canal, independently of the canal’s waterway operations.

The court ruling could also complicate CK Hutchison’s planned sale of dozens of ports worldwide — including the Panama terminals — for $23 billion to a consortium led by Mediterranean Shipping Company and BlackRock.

The verdict comes amid rising tensions between the United States and China over global trade routes, according to Reuters. It is seen as a win for Washington, as President Donald Trump has sought to curb Chinese influence over the Panama Canal, which carries around 5% of global maritime trade.